Comcast, DirecTV to offer prime-time shows on demand
Copyright 2005 Knight Ridder/Tribune Business NewsCopyright 2005 Philadelphia Inquirer (Pennsylvania)Philadelphia Inquirer (Pennsylvania)November 8, 2005, TuesdayBy Tony GnoffoFrom LexisNexis
The reconstruction of television viewing accelerated yesterday with the announcement of two deals to bring prime-time network programming to the world of video-on-demand.
Philadelphia's Comcast Corp., the nation's biggest cable provider, said it struck a deal with CBS to put four of the network's highest-rated prime-time programs -- CSI: Crime Scene Investigation, NCIS, Survivor and The Amazing Race -- on the cable company's video-on-demand service at 99 cents a show.
And DirecTV, the largest satellite-TV provider and one of Comcast's few competitors, announced a deal with NBC Universal to provide virtually on-demand programs from NBC as well as the Sci Fi, Bravo and USA networks.
The announcements followed last month's deal between Apple Computer Co. and the Walt Disney Co. to provide shows from the ABC-TV network -- Desperate Housewives and Lost -- for downloading from the Internet to new video iPods, computers, and TV sets hooked to computers.
Taken together, the developments represent "the beginning of the end of the TV schedule," said Josh Bernoff, a cable analyst at Forrester Research in Cambridge, Mass.
They can be expected to open a "floodgate" of similar deals to bring high-demand programs from traditional television networks to new distribution channels, said Allen Sabinson, a former network executive who now directs the Kal & Lucille Rudman Institute for Entertainment Industry Studies at Drexel University.
"We really want to do this with all the top-20 shows," said Stephen B. Burke, Comcast's chief operating officer and head of its cable business.
The company has been negotiating with CBS and the other major networks for more than a year to get their programs on video-on-demand, he said. Last month's Apple-ABC announcement probably helped move this deal along, he said.
"This is the first change-the-landscape deal we've done. We think there will be more," he said.
Up to now, Bernoff said, the obstacles to such deals have been local broadcast affiliates, who expected to retain exclusive access to the network shows; agencies representing actors, who expected additional compensation; and syndicators, who worried that the overexposure of the shows on VOD would diminish their syndication value.
The Comcast-CBS deal avoided some of those hurdles by limiting the agreement to shows and markets owned by Viacom.
Even without such high-profile programming, Comcast says video-on-demand has been a huge hit with its subscribers. So far this year, Comcast's digital subscribers -- who now number about 9 million of its 21.4 million cable subscribers -- have ordered more than one billion VOD programs. The VOD menu of more than 3,500 titles at any given time includes movies, children's programs, documentaries, music videos, and other cable-network fare. Most of the programs are free, though some movies cost $2.99 and up for a 24-hour viewing window.
The Comcast-CBS agreement, which takes effect in January, covers only those Comcast subscribers who live in the seven markets nationwide where CBS has broadcast stations that it owns and operates. Philadelphia is one of those markets -- KYW-TV, Channel 3, is owned by CBS' parent, Viacom Inc.
The programs will be made available on Comcast's On Demand service as early as midnight after their initial broadcast. Viewers would pay 99 cents to watch an episode; the shows would include all the commercials that appeared during the initial broadcast, although customers would retain the ability to fast-forward through them.
To get VOD, customers must subscribe to Comcast's digital tier of service, which starts at about $59.95 a month.
Under the NBC-DirecTV deal, a selection of NBC and cable shows would be transmitted to a set-top digital video recorder, where they could be accessed for a 99-cent fee. Those shows would not include advertising.
In both cases, the 99-cent fees would show up on subscribers' monthly bills.
DirecTV subscribers who want to take advantage of the service would have to purchase a new set-top box that will have a list price of $100. A DirecTV spokesman said the company would offer a $100 rebate to initial customers.